You Should be Thankful a Domain Name is Undeveloped | DomainInvesting.com
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You Should be Thankful a Domain Name is Undeveloped

20

I love waking up to the peaceful sound of ocean waves breaking on the beach while the sun streams in through the sheer curtain panels covering the windows. At some point down the road, we will probably buy a beach house in Nantucket. When that time comes, I will almost certainly have to work with a real estate agent to find the perfect house or piece of land that fits our needs and budget.

It would be so much easier if we could just visit town hall, select an undeveloped oceanfront lot, fill out a bit of paperwork, cut a very small check to cover the registration fee, and register our property with the recorder of deeds. This is obviously not possible because pretty much every piece of oceanfront real estate is owned by someone or not available for sale. If someone wants desirable real estate to build a home or business, they will need to need to buy it from the owner and pay whatever the market rate is. This is the case whether the piece of real estate has a structure on it or is totally undeveloped.

When it comes to domain names, the same thing holds true. Just about every desirable domain name is owned by an individual or entity. Some domain names have businesses operating on them, some are used for personal websites, and others are not developed (or underdeveloped). If a person wants to buy this valuable domain name, they need to work with the owner to come up with a fair sale price based on the market value. For example, the market has established that 3 letter .com domain names are worth at least 5 figures, often 6 figures, and perhaps 7 figures. A domain name is not worth less than the market value just because it doesn’t have a full business operating on it.

I can’t tell you how many people make ridiculously low offers using the logic that my domain name is not being used or is underutilized so it is not worth much. They seem to think that because I have not developed Hoy.com (means “today” in Spanish) that I am going to sell it for a fraction of its market value. No, that is not going to happen.

People seeking to buy a great .com domain name should be happy it is owned by a domain investor or someone else who is willing to sell it. I have come across and/or tried to buy thousands of great domain names that are simply not for sale. I would encourage them to try to buy a domain name from Oracle or Salesforce.com to see what it is really like to try to buy something that is not for sale regardless of the offer. Buyers should be thankful the domain name they want for a business or project is not yet developed into a major brand or owned by a huge company rather than get upset that it is owned by a domain investor.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (20)

    Luc L.

    Elliot,

    This is my favorite post of 2018! Awesome job explaining the similarities between real estate and domains.

    You’re spot on man.

    Luc

    February 21st, 2018 at 2:39 pm

    Raymond Hackney

    I once said that almost exact thing to a start up, their reply was for me to stick my laptop up my ass.

    While I agree with you, not everyone outside the domain bubbles sees it that way.

    February 21st, 2018 at 2:56 pm

      Elliot Silver

      Totally agree… and those people can go ahead and use a totally nonsensical domain name or an unknown .whatever domain name.

      In reply to Raymond Hackney | February 21st, 2018 at 2:59 pm

      Snoopy

      Really? That would not be easy.

      In reply to Raymond Hackney | February 21st, 2018 at 3:23 pm

    Vin Jacques

    You are so right! BTW, while you wait for that beach front house in Nantucket, I’ve got BeachLots.com, if you’re interested…LOL!

    February 21st, 2018 at 3:23 pm

    Steve

    Great post. Get it published on a sheeple news site. Preaching the choir here. Amazing how out of touch some buyers are.

    February 21st, 2018 at 3:58 pm

      Elliot Silver

      Will be s good post to reference when I receive an uneducated offer.

      In reply to Steve | February 21st, 2018 at 5:25 pm

    Mark Thorpe

    Just can’t resist writing an article that Includes one of your domains. 😉
    Miss those articles that Included travels.com. ;-p

    February 21st, 2018 at 4:32 pm

      Elliot Silver

      I rarely do it, and when I do, it is relevant and at least it’s a half decent domain name.

      A $1,000 lowball offer on Hoy.com was the impetus for this post.

      In reply to Mark Thorpe | February 21st, 2018 at 4:35 pm

      Mark Thorpe

      AHOY mate! 🙂

      In reply to Elliot Silver | February 21st, 2018 at 5:43 pm

      Anon

      I usually find comps (name, price, date, venue) from NameBio.com that show the value of similar domain name sales and email them those. It’s quick and easy to do. It’s very hard for buyers to argue against comps, just like it is for buyers of residential property. If they do argue, they are overly emotional or irrational buyers who are not worth investing more time talking to. Only if their perception of the value of the domain name changes and they come back with a comp-driven offer do I ever re-engage with them. I’ve got better things to do with my time than try to convince irrational buyers of the value of a domain name.

      In reply to Elliot Silver | February 21st, 2018 at 8:19 pm

    Nick

    Great post! I routinely receive low ball offers on my domains. Buyers actually believe they have some RIGHT to my domain. Their snarky and rude comments only polarize the negotiations and increase the asking price.

    If I really wanted to buy something that ONLY ONE PERSON owned, I would be sure to be polite and professional. As domain investors, we are not selling Honda Civics where thousands are available and buyers can shop dealerships or private sellers to find their best price.

    The beach front property analogy is one that I use myself to explain the value/price of a domain. It blows my mind the way buyers react. Here are a few of my favorites:

    “You only paid $10 for it!”
    “Why do you own my name!?”
    “How did you get MY name??”

    February 21st, 2018 at 5:22 pm

    John

    This was a really inspired post, which according to Merriam-Webster means “outstanding or brilliant in a way or to a degree suggestive of divine inspiration.” (Proverbs 16:9)

    February 21st, 2018 at 6:22 pm

    abc_xyz.com

    Hoy.com is a great domain name. You must receive a tone of lowball offers for it?

    February 21st, 2018 at 8:41 pm

      John

      It is a great domain, abc, but is it as great as ChewyChipsAhoy.com?

      In reply to abc_xyz.com | February 21st, 2018 at 10:37 pm

    Sam

    Damn Right.

    February 21st, 2018 at 9:08 pm

    Mean Domains

    What a beautiful way to bring things into perspective…

    February 22nd, 2018 at 1:23 am

    Steve B

    Right on Elliot. This comes down to a lack of understanding.

    Domain names are very similar to physical real estate. There are many variables that translate to value.

    For example, the domain extension is like the neighborhood, and the keyword is like the property itself.

    February 22nd, 2018 at 12:13 pm

    steve

    I met one of Jeff Bezos’s real estate agents (he probably has dozens) at a party and I asked her if she could check with her client Bezos to see if he’d be willing sell the undeveloped domain awake.com and if so, how much?

    She let me know her client is “not interested” in selling any of his domains.

    I also should mention I recently sold my home in the Grove in Florida — a home we renovated and put a lot of love in — money, time, resources.

    The real estate agent informed me the property would be MORE valuable without a home on the lot (it was built in the 1950s).

    But, yes, I get inquiries about domains every week — and people make lower than market offers because the domain is “not in use” or “not even developed”. I’ve even had a few characters ask me to donate 5 figure domains to them so they “could put the URL to good use”.

    I never take these “offers” personally — if I’m in a really great mood, I’ll even respond and thank them for their “generous” offer, “however I must decline”.

    No doubt many people visiting this blog have similar stories – per “offers” for undeveloped domains.

    February 22nd, 2018 at 4:48 pm

      abc_xyz.com

      2018 and 80% of the US population aren’t awake.com. When will they learn?

      In reply to steve | February 22nd, 2018 at 9:44 pm

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